TALLINN - When it comes to Estonia's dependence on the transit of Russian oil products, the country's business experts have an answer: The country should diversify its transit flow and look into short-sea shipping in order to break away from the Russian market.
Speaking at a transit conference held on a Tallinn-Helsinki ferry, Tallinn Mayor Edgar Savisaar said that Estonia lacks a clear governmental strategy regarding transit, a fact that could seriously undermine the country's competitiveness.
The mayor added that the government should stop considering Tallinn Port 's an economically flourishing state-owned company and the largest port in the Baltics 's as a "milk cow" and leave more money in the company for further development.
He also noted that because Estonia does not have a veterinary control point at the Narva railway station, a service necessary for beef and dairy cargo, the government is losing about 300 million kroons (19 million euros) a year.
Meelis Atonen, who recently resigned as economy minister, said that while the share of transit in Estonia's GDP comprises up to 25 percent (in accordance with Russian sources), the latest analysis by economists shows the actual GDP share coming from transit as a little over 10 percent.
"Russia's discriminatory railway tariffs make us think that we should not bet on the transit of Russian oil products," warned Atonen. "We should diversify our transit. Processing container cargo looks more interesting in the near-term."
In his opinion, the state railway supervision agency should closely work with Estonian Railways to avoid misunderstandings and keep the railway services working throughout the year. As he concluded, "Short-sea shipping on the basis of EU programs, better cooperation with Scandinavian ports and closer cooperation with Russia regarding the Narva railway junction is what we should think about."
According to Vyacheslav Ruksha, head of Russia's state agency for sea and river transport, the Russian government's priority is to handle 75 percent 's 80 percent of export cargo through its own ports.
"In three to four years the port in Ust-Luga will be a full-service port. We are correcting the port's development strategy now, and it is probable that there will be an industrial complex near the port," said Ruksha.
One of the strategies of the Ust-Luga port, located on the Gulf of Finland, is the construction of a container terminal with a maximum annual capacity of 4 million TEU (20-foot equivalent units) 's which would bite into the Port of Tallinn's possible expansion plans.
Ruksha, who formally worked as director of the Port of Murmansk, said that once Primorsk's port, which opened in 2001, hits its maximum capacity of oil product handling 's or 62 million tons 's the main dilemma for Russia will be in developing pipeline or railroad to Ust-Luga's port.
"We don't have a basis for long-term partnership with the Baltics. We have to find such a basis and sign relevant agreements in one or two years. Otherwise the transit will be mostly going through Russia's ports on the Baltic Sea," said Ruksha, adding that, thanks to the high oil prices, Russia has enough finance for any major port project.
Raivo Vare, former head of the Pakterminal oil transit company and one of the most well known experts in the transit business, emphasized that Estonia's geographic location defined its economic possibilities.
"Our only unlimited resource is brain activity," said Vare, quipping about the country's lack of natural resources. In his opinion, even though short-sea shipping has not received much attention in Estonia, it's one of the EU's current sea transport policy priorities.
Vare further emphasized the importance of railway infrastructure and said that so far the most important factor to affect Baltic transit was Russian railway tariffs. Everything else was secondary, he said.
